Branch audit and tax audit
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 June 2012
Dear Experts,
One of my client (Branch of Limited Company) opens a new branch in UP.
Its starts operation from June 2011.But Opens branch from November 2010 however they had not prepared books of accounts for 31 mar 2011.
My querries is that -
1.Is it new branch treated for this year 2011-12?
2. They paid expenditure upto 31 mar 2011 for fixed Assets and also made provision for exp payable for Salary and Rent becaz they hired employees and take office on Rent?
3.Hence Opening Balances shown in opening 1-4 2011.Is it correct.
One of my client (Branch of Limited Company) opens a new branch in UP.
Its starts operation from June 2011.But Opens branch from November 2010 however they had not prepared books of accounts for 31 mar 2011.
My querries is that -
1.Is it new branch treated for this year 2011-12?
2. They paid expenditure upto 31 mar 2011 for fixed Assets and also made provision for exp payable for Salary and Rent becaz they hired employees and take office on Rent?
3.Hence Opening Balances shown in opening 1-4 2011.Is it correct.
Amol S Joglekar
(Expert)
08 June 2012
01. It is new brach for last year i.e.2010-11 and not 2011-12. 02. Opening balances are to be verified from the HO record. Accordingly audit of branch can be conducted for the year 2011-12.
CA Hardik Bunha
(Expert)
08 June 2012
Hi, my friend,
1st of all this branch will not covered under audit u/s 228.
if operation is not started any company makes expenditure on fixed assets and rents then that expenses will be capitalised.
in the case of fixed asset opening balance is valid but for rent and salary capitalised.
1st of all this branch will not covered under audit u/s 228.
if operation is not started any company makes expenditure on fixed assets and rents then that expenses will be capitalised.
in the case of fixed asset opening balance is valid but for rent and salary capitalised.
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